Korea National Oil Corporation–Korea Gas Corporation Merger Proposed… Resource Development to Be ‘Maintained on aLimited

The government has announced a public-sector function reform plan to merge the Korea National Oil Corporation and the Korea Gas Corporation and establish an energy security system. The plan calls for oil stockpiling and limited oil exploration and development functions to be transferred to a proposed integrated entity tentatively called the Energy Resources Corporation, but the detailed scope of oil exploration and development, the merger timeline, and organizational changes have not yet been finalized.

On September 3, 2026, the government announced a public-sector function reform plan that proposed merging the Korea National Oil Corporation and the Korea Gas Corporation. The plan covers 109 public institutions and includes strategic structural reform, the consolidation of similar or overlapping functions, and the integration of subsidiaries and small-scale institutions. The purpose of the merger is to combine the two institutions’ functions and establish an energy security system.

How Much of KNOC’s Functions Would Be Transferred Under the Merger Plan?

The merger plan reportedly includes transferring KNOC’s oil stockpiling and limited oil exploration and development functions to the integrated institution, tentatively called the Energy Resources Corporation. However, an official from the Ministry of Trade, Industry and Energy explained that oil exploration and development would not be halted entirely. The stated intention is to move away from the past model in which KNOC directly invested large sums of money and transition to a business structure with lower risk exposure.

KOGAS Logo.svg · Korea Gas Corporation · Public domain · Wikimedia Commons

In its official materials, KNOC identifies oil development projects and the national oil stockpiling program as its major areas of work. As of the end of December 2024, it operated 17 producing fields, one development field, and 11 exploration fields. It also had nine stockpiling bases nationwide, with storage facilities totaling 146 million barrels. Excluding jointly held stockpiles, its oil reserves were recorded at 99.49 million barrels.

Resource Security Concerns and Issues Yet to Be Decided

Experts have expressed concern that reducing resource development functions could weaken the country’s long-term resource development capabilities. This does not mean that the policy’s effects have been confirmed; rather, it highlights the question of how exploration personnel and technical expertise will be maintained after the merger. The actual impact can be assessed only after the final restructuring plan and its implementation results are known.

Based on the information currently available, the merger’s effective date, specific changes to the organization, workforce, and budget, and the detailed scope of “limited oil exploration and development” have not been finalized. During the function reform process, the government held five rounds of labor–government consultations with the joint public-sector response committee of the two major labor federations and said that additional consultations would continue.